Wealth in China: Sizing the Market Opportunity

Wealth in China: Sizing the Market Opportunity

Summary

Wealth in China: Sizing the Market Opportunity analyzes China's wealth and retail savings and investments markets, with a particular focus on the HNW segment. Analysis is based upon our 2014 Global Wealth Managers Survey, our Global Wealth Markets Analytics, and our Global Retail Investments Analytics.

Synopsis

  • Size your potential client base using our proprietary data, presenting the number of affluent individuals by liquid asset band to 2018.
  • Understand the drivers behind the growth of the affluent market, such as the wider macroeconomic environment and investment preferences.
  • Quantify HNW asset allocations into non-liquid assets such as property. Find out how much of their investible assets are held offshore.
  • Export the graphics from the dashboard, or if you are more at ease using Excel, export the data into your own worksheets.
Reasons To Buy
  • How large is the HNW market in China?
  • What is the penetration of affluent individuals in China?
  • What is the current and future mix of asset class balances in China?
  • How much of their wealth do Chinese HNW individuals invest offshore?
  • Which booking centers are used by HNW individuals to invest offshore?
Key Highlights

Thanks to a predicted drop in economic productivity, the remarkable wealth growth rates of the past few years will not be repeated over the forecast period. Nevertheless, strong predicted retail investments growth – led by strong equity performance – will continue to see the market grow at a faster rate than in the wider region.

Thanks to strong stock market performance, 2014 was a strong year for China’s retail investment market, which expanded by 14.7%. Albeit to a lesser degree, a bullish equity market and a reallocation of assets (which will benefit equities as well as wealth management products) will sustain strong retail investment market growth going forward.

Chinese HNW investors allocate a noteworthy proportion of their investible assets into non-traditional investments, mostly in direct property. In addition, alternative investments are set to play an increasingly important role in HNW portfolios, and wealth managers need to be ready to meet this demand.


  • Sizing and Forecasting the Chinese Wealth Market
    • 3.2% of China's affluent individuals can be considered HNW
      • Affluent individuals in China account for 2.9% of the total adult population
    • Affluent individuals account for 2.9% of the population but hold 80.1% of liquid assets in China
      • Chinese HNW individuals held $3,252bn in liquid assets in 2014
  • Drivers for Growth in the Chinese Wealth Market
    • China's retail savings and investments have impressed with remarkable growth in recent years
      • China's retail investment market is forecast to perform strongly despite weaker economic conditions
      • Despite a reallocation of assets out of deposits in 2014, a strong bias towards this asset class continues to limit retail savings and investment growth in China
    • The Chinese economy is slowing down, limiting wealth creation
      • The days of double digit economic growth are over, but China will still outstrip Western growth rates
      • China's stock market has enjoyed a bullish run after years of subpar performance
  • HNW Investment Preferences
    • Chinese HNW individuals allocate 41% of their portfolios outside traditional liquid assets
      • Chinese HNW investors allocate an above-average proportion of their wealth into property, but this is about to change
      • Demand for alternatives and commodities is expected to rise significantly
    • A significant proportion of HNW wealth is invested offshore
      • Despite maintaining a closed capital account, a significant amount is leaving the country every year
      • Diversification and the availability of better options prompt Chinese individuals to invest offshore
        • Table Progressive tax rates levied in China, 2015
      • The US is the single most important booking center for Chinese HNW wealth
  • Appendix
    • Abbreviations and acronyms
    • Supplementary tables
      • Table Total Chinese liquid wealth segmented by affluent category and asset band ($bn), 2008-13
      • Table Total Chinese liquid wealth segmented by affluent category and asset band ($bn), 2014e-18f
      • Table Chinese adult population segmented by affluent category and asset band (000s), 2008-13
      • Table Chinese adult population segmented by affluent category and asset band (000s), 2014e-18f
    • Definitions
      • Affluent
      • Domicile
      • DTA
      • HNW
      • Liquid assets
      • Mass affluent
      • Measures of growth
      • Onshore
      • Residency
      • TIEAs
    • Methodology
      • Verdict Financial's 2014 Global Wealth Managers Survey
      • Verdict Financial's 2013 Global Wealth Managers Survey
      • Global Wealth Model methodology
      • Global Retail Investments Analytics methodology
        • Table Chinese yuan-US dollar exchange rate, December 31, 2012 and December 31, 2014
    • Bibliography
    • Further reading

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